Why can Bitcoin be compared to cash (Why can Bitcoin be used as currency)

Why can Bitcoin be compared to cash? From a historical perspective, Bitcoin has always been seen as the future of currency as a means of value storage. However, in real life, if we want to use it for payment, we need to first use paper money, hard drives, and other electronic wallets, which are often difficult to transfer or lose, such as special assets like gold or real estate.

When someone asks about Bitcoin and cash, they reply, “The reason these two technologies have such great potential is because they have tremendous potential.” In fact, “this issue is fundamentally different from traditional financial markets.” So what exactly is “Bitcoin?” According to data from a US bank, addresses holding 100 to 10,000 BTC currently account for less than 5% of the total Bitcoin in circulation globally. However, since 2009, about 9 million addresses have already received funds of over 1 billion dollars to support the use of Bitcoin. Bitcoin can be used to purchase goods and services such as stocks, bonds, and even property deeds; additionally, many people also see digital currency as a good payment tool due to its scalability and high level of decentralization. Therefore, although people generally may not be interested in digital currency, many believe that it can indeed achieve frictionless transactions outside of the existing payment system and provide a new form of payment. So, in recent years, more and more institutions have begun accepting and investing in this new technology – Bitcoin. However, some still consider Bitcoin as a speculative gambling product: “You might not have found a scammer like me! I won’t tell anyone, but I’ll tell you: don’t do it, quit your job!” Why can Bitcoin operate on the blockchain? Over time, its network has become more secure and faster. “Now many users know how Bitcoin works, and everyone believes it is effective,” explained a Twitter user, “because you can turn Bitcoin into a currency for savings, not just taking risks.” Of course, there are many other factors, such as government regulation, tax policies, and central banks considering adopting this method. In addition, Bitcoin can be used for settling various transactions, including transfers and remittances. The anonymity of Bitcoin makes it a better choice.

Why can Bitcoin be used as currency?

Written by author: Li Xiaolai.

Odaily Star Planet Daily Translator | Moni’s Note: Bitcoin has been used as a payment, storage, and store of value in major financial markets worldwide. However, due to the development of blockchain technology, which has far surpassed traditional banking systems, Bitcoin is now considered as a substitute “digital gold.” But to some extent, it is not the only encrypted asset widely believed to have value.

According to a research report from the Bank for International Settlements (BIS), more than 20 countries/regions worldwide were developing new forms of tokens associated with sovereign laws, such as Bitcoin cash or other similar products, in 2019. Although these projects may be aimed at attracting more investors, they are better in many ways than ever before. How did Bitcoin become a currency? First, let’s understand what “legal tender” is. We know that Bitcoin is a form of electronic cash entirely operated by computer networks. This means that you do not need to provide funds to government agencies to purchase this currency or conduct payments or transfers through the Internet. When someone uses your phone, you will receive a simple sequence of characters, for example: “I give you money,” which is Bitcoin. If you want a person to do the same thing with their money, then they need to receive remittances from different countries around the world. Therefore, you can easily buy commodities such as the US dollar or precious metals, just like directly buying and selling stocks. However, this method also has many restrictions, including higher additional service fees charged by US and other governments for companies they do not trust. There are also many restrictions, such as people without bank accounts being unable to open company accounts, which puts customers in a predicament. Of course, if you wish, you can also entrust their work to a company with a legitimate operating license, but the cost of doing so is high.

Secondly, considering the characteristics of Bitcoin itself, its economic attributes must be considered: as long as it is designed based on cryptography and cannot guarantee anonymity, Bitcoin can play a role. This is crucial for users who want to hold Bitcoin. In fact, the reason why Bitcoin is used for daily commercial purposes is that people can settle transactions peer-to-peer and store them in a secure place rather than relying on centralized servers. Bitcoin can also help facilitate more transactions. For example, when people want to make Bitcoin payments using the Lightning Network, users only need to store Bitcoin in their wallets.

Finally, as more and more merchants begin to adopt Bitcoin for payment, new market opportunities may emerge, and companies like PayPal may utilize blockchain technology to improve service efficiency and reduce costs.